Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1989] EWCA Civ 4 (15 December 1989)

An art dealer sold a painting attributed to Gabriele Münter to another dealer for £6,000, but it was later discovered to be a forgery. The buyer claimed breach of the implied condition under s.13(1) of the Sale of Goods Act 1979 (sale by description). The Court of Appeal held there was no sale by description as the buyer had not relied on the seller's attribution but on his own judgment.

Facts

The defendant company, Christopher Hull Fine Art Ltd, through Mr Hull, offered to sell two oil paintings described in an auction catalogue as works by Gabriele Münter (1877-1962), a German expressionist artist. Mr Hull telephoned the plaintiff company, Harlingdon and Leinster Enterprises Ltd (trading as Leinster Fine Art), specialists in German art, stating he had paintings by Münter for sale. Mr Runkel, an employee of the plaintiff company, visited Mr Hull’s gallery to view the paintings.

At the meeting, Mr Hull made clear that he had no expertise in Münter’s work, had never heard of the artist, thought little of her paintings, and was to a certain extent relying on Mr Runkel’s judgment. Mr Runkel examined the paintings and agreed to purchase one for £6,000. The invoice described the painting as being by Gabriele Münter. The painting was later discovered to be a forgery, worth only £50-100.

Issues

The principal issues before the Court of Appeal were:

1. Sale by Description under s.13(1) Sale of Goods Act 1979

Whether the sale was a ‘contract for the sale of goods by description’ such that there was an implied condition that the goods would correspond with the description.

2. Merchantable Quality under s.14(2) Sale of Goods Act 1979

Whether the painting was of merchantable quality within the meaning of the Act.

Judgment

Sale by Description

The Court of Appeal (Nourse LJ and Slade LJ, Stuart-Smith LJ dissenting) held that this was not a sale by description. The trial judge’s finding that Mr Runkel did not rely on the description of the painting as being by Münter was upheld.

Nourse LJ stated:

“For all practical purposes, I would say that there cannot be a contract for the sale of goods by description where it is not within the reasonable contemplation of the parties that the buyer is relying on the description.”

Slade LJ observed:

“If a party to a contract wishes to claim relief in respect of a misrepresentation as to a matter which did not constitute a term of the contract, his claim will fail unless he is able to show that he relied on this representation in entering into the contract; in general, however, if a party wishes to claim relief in respect of a breach of a term of the contract (whether it be a condition or warranty) he need prove no actual reliance.”

However, Slade LJ noted that reliance remains relevant as evidence of whether the parties intended the description to be a term of the contract.

Merchantable Quality

The majority also rejected the claim under s.14(2). The trial judge had found that paintings are commonly bought for aesthetic appreciation, and the painting was fit for that purpose. Nourse LJ agreed, noting the painting could still be hung and enjoyed for what it was. Slade LJ held that since the contract was not one for sale by description, the s.14 claim could not succeed through what he termed ‘the back door’.

Stuart-Smith LJ dissented on both points, holding that the sale was by description and that the painting was not of merchantable quality given its description as a Münter and its price of £6,000.

Implications

This case is significant for several reasons:

Reliance in Sales by Description

The case establishes that in determining whether a sale is ‘by description’ under s.13(1), the court must consider whether the buyer relied on the description. Where a buyer exercises their own judgment rather than relying on the seller’s description, particularly where the seller has disclaimed expertise, the sale may not be by description.

Dealer-to-Dealer Transactions

The case highlights the particular considerations applicable to sales between dealers, where expertise and reliance may differ from consumer transactions. Nourse LJ observed that the principle of caveat emptor often applies between dealers and suggested that courts should be exceedingly wary of giving a seller’s attribution contractual effect in such circumstances.

Art Market Transactions

The judgment provides guidance on the treatment of attributions in art sales, recognising the inherent uncertainty of attributions and the different levels of confidence with which they may be made.

Verdict: Appeal dismissed. The Court of Appeal upheld the trial judge's decision in favour of the defendant. The sale was not a sale by description within s.13(1) of the Sale of Goods Act 1979, and there was no breach of the implied condition as to merchantable quality under s.14(2).

Source: Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1989] EWCA Civ 4 (15 December 1989)